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A Will
(also known as a “Last Will and
Testament”) is a written declaration
of a person’s intentions as to
the disposition of his or her property
taking effect at death. The primary
purpose of this document is to establish
a structure to govern and distribute
probate assets. Typically, probate
assets are property that are titled
in one’s name at death, and which
do not have a beneficiary designation
(such as a life insurance policy or
IRA). A Will typically contains
provisions for who should administer
the probate assets upon death and how
those assets should be divided and
distributed. Traditionally, the
Will was the cornerstone of the estate
plan. However, in the Midwest,
the Revocable Trust has replaced the
Will as the primary means of transferring
assets at death (although a Will is
still a very useful document).
A Will is revocable and amendable
during life. A Will has no legal
effect during one’s lifetime
and only becomes enforceable at death. It
is also the primary document that allows
a parent to elect a guardian for any
minor children in the event that both
parents are deceased or disabled or
disabled. The parties involved in a
Will are:
- Testator. The individual
that creates the Will.
- Executor or Personal Representative. The
individual(s) and/or corporation(s)
empowered to administer the estate. The
Executor collects and inventories
probate assets, pays debts, taxes,
funeral costs and other eligible
expenses, handles claims and disputes,
and ultimately distributes the probate
assets in accordance with the provisions
set forth in the Will. The
actual duties of the Executor vary
according to the complexity and scope
of the estate assets and the written
plan.
- Legatee. An individual
and/or entity receiving cash or
liquid assets under the terms of
a Will.
- Devisee. An individual
and/or entity receiving real estate
under the terms of a Will.
- Guardian of the Person and Estate
of Minor Children. The
Guardian of the Person is an individual(s)
responsible for the care, custody
and upbringing of a minor child. The
Guardian of the Estate is an individual(s)
or corporation(s) responsible for
the financial affairs of a minor
child. Once a child reaches
the age of majority (18 in Illinois),
then the Guardians no longer have
authority to make decisions on
behalf of the child and that child
will receive full control over
his or her property, unless provisions
of the Will state otherwise. The
Guardian of the Person and Estate
are often the same individual(s),
but this is not required.
TYPES OF
WILLS
There are three principal types of
Wills that may be created:
- Outright Will. This
type of Will provides for probate
assets to be distributed outright
to the legatees and devisees at death. In
Illinois, if the aggregate value
of the probate assets exceeds $100,000
or if there is any real estate, then
a probate proceeding must be initiated
in the Circuit Court (the Probate
Court). If assets are distributed
to a minor child, then a guardianship
estate in probate court may also
be necessary. The probate
court in a guardianship court will
give substantial weight to the
guardians named in the Will, but
is not required to nominate those
individual(s) if the court feels
that it is not in the best interests
of the minor child.
- Will with Testamentary Trust. This
type of Will may be used when one
wants to leave probate assets in
trust at death, but does not set
up a Revocable Trust. This
type of will is no longer as popular
as several decades ago. With
the additional flexibility available
with a Will and Revocable Trust together,
we generally do not advise clients
to use this type of Will, given the
relative costs. A Will with
Testamentary Trust(s) is again generally
subject to proceedings in probate
court if the assets are in excess
of $100,000 or there is real estate. However,
if probate assets are distributed
to a testamentary trust for the
benefit of minor children, then
a guardianship estate may be avoided.
- Pour-Over Will. This
type of Will is used in conjunction
with a Revocable Trust. If
the Revocable Trust is properly funded,
then a proceeding in probate and/or
guardianship court may be avoided. However,
if the Revocable Trust was not fully
funded during lifetime, then the
Pour-Over Will serves as a “safety
net” by instructing the executor
to transfer those assets to the Revocable
Trust after the testator’s
death. This ensures that all
of the estate can be settled as a
single, cohesive whole. However,
like all Illinois wills, it does
not avoid probate if the aggregate
value of the assets passing by the
will exceeds $100,000, or if there
is any real estate. Therefore,
it is very helpful that all assets
be properly titled in the Revocable
Trust during lifetime.
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